The word bankruptcy to many is a scary word. Bankruptcy is for many considered a last report to their debt problems.

What exactly is bankruptcy?

It is a legal statement that confirms that you are unable to pay all of your debt back. Your assets such as your house and car are distributed between those to who you owe money, and the debt is written off completely. Those who choose bankruptcy often see it as a way to make a fresh start and it is always recommended to use a reputable bankruptcy lawyer in Pennsylvania or wherever you live to ensure that you get the most out of your decision to file for bankruptcy.

Advantages

• It is one of the quickest ways for a fresh start
• All debts will be written off
• Creditors are not allowed to take action against you anymore
• The experience isn’t as traumatic as it is often perceived to be
• You are allowed to keep basic possessions

Disadvantages

• You have to follow a set of rules after bankruptcy called ‘bankruptcy restrictions
• You will find it hard, probably impossible to get further credit for 6 years whilst the bankruptcy is on your file
• Your name and details will be published on the Individual Insolvency

Register

• You have to pay a fee to court to file for bankruptcy- at least 700
• You could lose your assets
• Some debts may not be written off by bankruptcy, for example court fines and student loans
• It can affect your job

This is one of the more extreme methods of getting out of debt and is not one to be taken lightly. It is best to speak to some professionals before you go through this process.